States demand more funds in pre-Budget meeting with Finance Minister Nirmala Sitharaman

New Delhi, November 25

State finance ministers in their pre-budget consultation have stepped up their demand for more funds, greater say in implementing centrally-sponsored schemes and an increase in payments for royalty on minerals.

These issues were raised by the states at a meeting called by Union Finance Minister Nirmala Sitharaman to elicit their views on the 2023-24 Budget to be presented on February 1.

Tamil Nadu Finance Minister P Thiaga Rajan said that states, cutting across party lines, said that centrally sponsored schemes are constraining states’ fiscal autonomy since in some schemes states end up contributing large amount which is more than the Centre’s contribution.

“All states, irrespective of political party, expressed common theme states fiscal autonomy is greatly constrained by the extent of centrally sponsored scheme, by the extent of changing ratios of funding of such schemes,” Thiaga Rajan told reporters.

States demanded that they should be given greater flexibility in implementing CSS.

CSS are implemented through a joint contribution of the Union Government and State Government Bihar Finance Minister Vijay Kumar Choudhary said centrally sponsored schemes should be limited as the burden on states for such schemes is increasing. The centre should implement only Central sector schemes if they want to help states, he said.

Meghalaya Chief Minister Conrad Sangma said he has demanded an increase in capital assistance given to the states. “Have asked for a system where it should be linked to population. Village-based schemes should be stressed on,” Sangma said.

Andhra Pradesh Finance M Buggana Rajendranath Reddy said he has sought special assistance towards capital expenditure. “We have demanded that state-promoted renewable projects to be included in green bond funding scheme,” Reddy said.

Himachal Pradesh Chief Minister Jai Ram Thakur sought better road, rail, air connectivity in the state to promote tourism. GST on apple packaging be reduced to 12 per cent from 18 per cent, said Thakur, who holds the Finance portfolio.

Chattisgarh Chief Minister Bhupesh Baghel asked the Centre to release funds for implementing the old pension scheme for state government employees.

He also demanded an increase in royalty for minerals extracted in the state and the fixation of different royalties on different grades of coal and iron ore.

According to a release by the Haryana government, Chief Minister M L Khattar demanded that the Centre give a special economic package to Haryana as 14 districts of the state fall in the National Capital Region and lot of resources have to be spent on construction and maintenance of infrastructure in these areas.